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Financial Terms | |
Back-up |
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Definition of Back-upBack-up1) When bond yields and prices fall, the market is said to back-up.
Related Terms:Aggregate SupplyTotal quantity of goods and services supplied. Aggregate Supply CurveCombinations of price level and income for which the labor market is in equilibrium. The short-run aggregate supply curve incorporates information and price/wage inflexibilities in the labor market, whereas the long-run aggregate supply curve does not. Asset-Backed SecuritiesBond or note secured by assets of company. Asset-backed securityA security that is collateralized by loans, leases, receivables, or installment contracts Back feeThe fee paid on the extension date if the buyer wishes to continue the option. Back flushThe subsequent subtraction from inventory records of those parts used Back officeBrokerage house clerical operations that support, but do not include, the trading of stocks and ![]() Back To Back AnnuityThis term refers to the simultaneous issue of a life annuity with a non-guaranteed period and a guaranteed life insurance policy [usually whole life or term to 100]. The face value of the life insurance would be the same amount that was used to purchase the annuity. This combination of life annuity providing the highest payout of all types of annuities, along with a guaranteed life insurance policy allowed an uninsurable person to convert his/her RRSP into the best choice of annuity and guarantee that upon his/her death, the full value of the annuity would be paid tax free through the life insurance policy to his family members. However, in the early 1990's, the Federal tax authorities put a stop to the issuing of standard life rates to rated or uninsurable applicants. Insuring a life annuity in this manner is still an excellent way to provide guaranteed tax free funds to family members but the application for the annuity and the application for the life insurance are separate transactions and today, most likely conducted through two different insurance companies so that there is no suspicion of preferential treatment given to the life insurance application. Back-to-back financingAn intercompany loan channeled through a bank. Back-to-back loanA loan in which two companies in separate countries borrow each other's currency for a BackdatingA procedure for making the effective date of a policy earlier than the application date. backdating is often used to make the age of the consumer at policy issue lower than it actually was in order to get a lower premium. backflush costinga streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires BackwardationA market condition in which futures prices are lower in the distant delivery months than in BankruptcyState of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from bankruptcyThe reorganization or liquidation of a firm that cannot pay its debts. Bankruptcy cost viewThe argument that expected indirect and direct bankruptcy costs offset the other Bankruptcy riskThe risk that a firm will be unable to meet its debt obligations. Also referred to as default or insolvency risk. Bankruptcy viewThe argument that expected bankruptcy costs preclude firms from being financed entirely Bottom-up equity management styleA management style that de-emphasizes the significance of economic Buy-backAnother term for a repo. charge-back systema system using transfer prices; see transfer CouponThe periodic interest payment made to the bondholders during the life of the bond. CouponDetachable certificate attached to a bond that shows the amount of couponThe interest payments paid to the bondholder. CouponThe annual interest payment associated with a bond. Coupon BondAny bond with a coupon. Contrast with discount bond. Coupon / CouponsThe periodic interest payment(s) made by the issuer of a bond Coupon datesThe dates when the coupons are paid. Typically a bond pays Coupon equivalent yieldTrue interest cost expressed on the basis of a 365-day year. Coupon paymentsA bond's interest payments. Coupon rateIn bonds, notes or other fixed income securities, the stated percentage rate of interest, usually Coupon RateThe rate of interest paid on a debt security. Generally stated on an Coupon rateThe nominal interest rate that the issuer promises to pay the coupon rateAnnual interest payment as a percentage of face value. Current couponA bond selling at or close to par, that is, a bond with a coupon close to the yields currently Current-coupon issuesRelated: Benchmark issues Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an Dividend clawbackWith respect to a project financing, an arrangement under which the sponsors of a project Dupont system of financial controlHighlights the fact that return on assets (ROA) can be expressed in terms Equity Buy-BackRefers to the investors percentage ownership of a company that can be re-acquired by the company, usually at a pre-determined amount. equivalent units of production (EUP)an approximation of the number of whole units of output that could have been Evening upBuying or selling to offset an existing market position. Excess SupplyA situation in which supply exceeds demand. FeedbackThe retrospective process of measuring performance, comparing it with plan and taking corrective action. Floating supplyThe amount of securities believed to be available for immediate purchase, that is, in the Foreign Corrupt Practices Act (FCPA)a law passed by U.S. Congress in 1977 that makes it illegal for a U.S. company to engage in various “questionable” foreign payments and Full coupon bondA bond with a coupon equal to the going market rate, thereby, the bond is selling at par. Give upThe loss in yield that occurs when a block of bonds is swapped for another block of lower-coupon Group Life InsuranceThis is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually one year renewable term insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates. Group of five (G5/G-5) The five leading countries (France, Germany, Japan, United Kingdom, and the U.S.) that Group of seven (G7/G-7)The G-5 countries plus Canada and Italy. Group rotation managerA top-down manager who infers the phases of the business cycle and allocates High-coupon bond refundingRefunding of a high-coupon bond with a new, lower coupon bond. Legal bankruptcyA legal proceeding for liquidating or reorganizing a business. Level-coupon bondBond with a stream of coupon payments that are the same throughout the life of the bond. Limitation on sale-and-leasebackA bond covenant that restricts in some way a firm's ability to enter into Lock-up CDsCDs that are issued with the tacit understanding that the buyer will not trade the certificate. Long coupons1) Bonds or notes with a long current maturity. Long coupons1) Bonds or notes with a long current maturity. Lookback optionAn option that allows the buyer to choose as the option strike price any price of the Loss carrybackThe offsetting of a current year loss against the reported taxable Low-coupon bond refundingRefunding of a low coupon bond with a new, higher coupon bond. Mark-upThe amount added to a lower figure to reach a higher figure, expressed as a percentage of the markupthe period after an announcement of a takeover bid in which stock prices typically rise until a merger or acquisition is made (or until it falls through). MarkupAn increase in the cost of a product to arrive at its selling price. Money supplyM1-A: Currency plus demand deposits Mortgage-backed securitiesSecurities backed by a pool of mortgage loans. Mortgage-Backed Securities Clearing CorporationA wholly owned subsidiary of the Midwest Stock Normal backwardation theoryHolds that the futures price will be bid down to a level below the expected Office suppliesThe cost of the supplies used in running an office. Paid-Up AdditionsA type of insurance policy or annuity in which the owner receives dividends, typically increases the death. Paid-up CapitalThat part of the issued capital of a company that has been paid up by the shareholders. Pass-through coupon rateThe interest rate paid on a securitized pool of assets, which is less than the rate Pay-upThe loss of cash resulting from a swap into higher price bonds or the need/willingness of a bank or PaybackThe length of time it takes to recover the initial cost of a project, without regard to the time value of money. PaybackA method of investment appraisal that calculates the number of years taken for the cash flows from an investment to cover the initial capital outlay. PaybackThe length of time required for the net revenues of an investment for the net revenues of an investment to return the cost of the investment. Payback methodA capital budgeting analysis method that calculates the amount of Payback PeriodThe number of years necessary for the net cash flows of an payback periodthe time it takes an investor to recoup an payback periodTime until cash flows recover the initial investment of the project. PickupThe gain in yield that occurs when a block of bonds is swapped for another block of higher-coupon bonds. Plowback rateRelated: retention rate. plowback ratioFraction of earnings retained by the firm. Prepackaged bankruptcyA bankruptcy in which a debtor and its creditors pre-negotiate a plan or Pure yield pickup swapMoving to higher yield bonds. Raw material supply agreementAs used in connection with project financing, an agreement to furnish a Real Money SupplyMoney supply expressed in base-year dollars, calculated by dividing the money supply by a price index. runupthe period before a formal announcement of a takeover bid in which one or more bidders are either preparing to make an announcement or speculating that someone else will. Sale and lease-backSale of an existing asset to a financial institution that then leases it back to the user. Sale and LeasebackAn agreement in which the owner of a property sells that property to a person or institution and then leases it back again for an agreed period and rental. Selling groupAll banks involved in selling or marketing a new issue of stock or bonds Set-upThe time required to make ready a machine or process for production, e.g. changing equipment setup costthe direct or indirect cost of getting equipment Setup costThe cluster of one-time costs incurred whenever a production batch is run, Start-up CostsCosts related to such onetime activities as opening a new facility, introducing Step-upTo increase, as in step up the tax basis of an asset. Step-up bondA bond that pays a lower coupon rate for an initial period which then increases to a higher Stripped mortgage-backed securities (SMBSs)Securities that redistribute the cash flows from the Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |